Amazon’s new delivery service will impact on Royal Mail’s parcels business

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​​Royal Mail warned that its parcels business will be hit by online retail giant Amazon’s decision to launch its own delivery service.

The group said the move would more than halve the potential growth of its parcels division, which makes up half of Royal Mail’s turnover.

Parcel delivery has become increasingly important to Royal Mail as online shopping booms and people write fewer letters, preferring to use email and social media.

Amazon was Royal Mail’s biggest customer, accounting for six per cent of sales.

Royal Mail warned that Amazon’s decision would reduce growth in the overall parcel market from four to five per cent to one to two per cent.

​Moya Greene, Royal Mail’s chief executive, said​: “When an online retailer of the size and scale of Amazon decides to build out its own delivery network, that changes the market for everybody​.​”

Despite this, the company said its performance remains in line with expectations although full year results will depend on its Christmas performance.

Graham Spooner, investment research analyst at The Share Centre, said: “Royal Mail announced a fall in its first half profits, however results were not as bad as feared.”

Royal Mail ​announced a 21 per cent decline in ​operating profit ​to £279m ​for the six months to September 28.

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